Employer Plans Evolve with Health Care Reform Deadlines, Changes

Many employers — both US and multinational — are still scrambling to prepare for the US federal health care reform law. Although the employer-shared responsibility penalties were delayed for a year, employers still face higher costs in 2014 from fees, design requirements, and potential increases in enrollment. A recent Mercer survey of nearly 900 US employers found that employers have upped their estimates of the cost impact of the Patient Protection and Affordable Care Act (ACA) since 2011 – and nearly a third still don’t know what the impact will be.

“Creative cost management is going to be a fact of life under reform, and the delay doesn’t change that,” says Tracy Watts, Mercer’s US health care reform leader. “In the short term, we expect to see an increase of 2%–3% or more in health plan cost in 2014, even if employers table plans to extend coverage to all employees working 30 or more hours per week.”

“Longer-term, avoiding the excise tax on high-cost plans slated for 2018 remains a daunting challenge,” she adds. “More than a third of employers Mercer surveyed said that they were taking steps in 2014 to help bring down cost by 2018.”